Cameron's multi-billion pound life sciences strategy – what it means for London

Is the government’s grand plan hot stuff or hot air?

In a rousing oration with aspirations of Churchill circa 1940 David Cameron yesterday outlined the government’s plan to boost, recharge – save even – the UK’s life sciences industry.

We are at a “crossroads” declared the PM in a speech delivered to the industry at the FT Global Pharmaceutical and Biotechnology Conference.

“Behind us lies a great history: Watson and Crick unravelling DNA, genetic finger-printing, the first CT scan, the first beta blocker, the first test-tube baby… We can be proud of our past, but we cannot be complacent about our future,” said Cameron in his opening statements.

He promised a £180m Biotechnology Catalyst fund to get things moving. He’s also found £50m to create a London-based cell therapy innovation centre.

The PM promised to protect the science budget, announcing an extra £495m of ring fenced capital funding for science.

A further £800m was announced for Biomedical Research Centres, including the cell therapy centre in London. Where these centres will be based is as yet unknown but there is hope that some will be set up in London – further supporting the capital’s world leading institutions such as Queen Mary’s, UCL and King’s.

Some sceptics dismissed the “new” funding claims, however, pointing out that only £90m of the £180m Biotechnology Catalyst fund will be “additional funding”.

Either way, the cash is long overdue. Like most British industries, life sciences – the umbrella term for pharmaceutical, medical and biotechnology companies – has been hit hard by recession.

Despite an annual turnover of £50bn and an employment roll of more than 165,000 people, more and more research and development centres have closed in recent years. Biotech firms have suffered from a lack of investment, all of which has fuelled concerns that the UK will irrevocably fall behind in a field it once led.

In February the sector was dealt a heavy blow when the Viagra-making drug firm giant, Pfizer, announced it was closing its R&D centre based in Kent.

Writing in LondonlovesBusiness.com, the chairman of London pharma firm Domainex, Dr Keith Powell, has repeatedly lamented the capital’s lack of biotech and pharma firms, citing a lack of government funding, a shortage of laboratory space and high rents as the major problems.

That, and the “poor perception” that the investment companies have of the industry: “The biotechnology development path is longer and harder than that in other technology fields, so it is a field where specialist investors are needed,” wrote Dr Powell in a recent column.

Yesterday’s strategy was Number 10’s response to these long term problems.

In addition to the new cash Cameron announced a raft of tax breaks and tax credits, which have been applauded – if a little quietly.

These measures will provide businesses with the opportunity to “turn their innovations into commercial products that will deliver major health benefits which could transform the lives of people with serious or chronic illnesses”, said the Department of Health in a statement.

But did the life sciences industry like what it heard?

The cell therapy innovation centre met with mixed responses. Dr Powell isn’t a fan. “It’s another technology which needs time to see the pitfalls,” he told LondonlovesBusiness.com.

“If there is a proven business model in an area then the industry will invest in the downstream technologies. I would rather see the money added to the catalyst fund.”

But David McMeekin, chairman of Company Guides Venture Partners which manages the London Technology Fund, called the centre “wonderful” and said all of life sciences needed to be backed – “If you built a warship you wouldn’t choose either the hull or guns, you need both.”

The Association of the British Pharmaceutical Industry welcomed the speech overall, in particular the controversial measures that involve providing access to patients’ records. Said the association in a statement released shortly after the speech: “[we welcome] better access to health data, with appropriate protection for patient confidentiality. This opens up the UK’s unique offering to provide a true picture of health challenges and benefits within the NHS.”

The CBI said the strategy demonstrated the government’s commitment to work with businesses to develop “this important part of our economy”.

Tim Bradshaw, CBI Head of Enterprise & Innovation policy, said: “The £180m catalyst fund will help businesses accelerate the development of new treatments and technologies, turning our excellent research into commercial success.

“Increasing access to data will lead to greater innovation, help to improve outcomes for patients, and support growth. The challenge now is for the NHS and the industry to work together to make this plan a reality.”

Details of the £180m fund, such as who exactly will be managing it, are not clear. Whether it will be used for seed investment to fund the first round of testing of potential drugs, a process which costs an average of £5m, or for the less risky and more expensive phase two round is unclear.

It takes up to £400m to bring a new medicine to market. One investor, who did not want to be named, said the £180m was to be applauded but needed to be managed by a venture capital house to be successful - not The Technology Strategy Board as is the case.

The Guardian columnist and author of Bad Science, Dr Ben Goldacre, welcomed the proposals, particularly the concept of opening up patient data to researchers. He dismissed privacy concerns, tweeting: “There’s nothing new in sharing anonymised health records with researchers” and “Privacy concerns need to be managed proportionately but at the moment we cause unnecessary suffering and death by obstructing.”

Social Bookmarks